thanks Dimitris. i was able to get it done. for other i am writing some points to follow.
1) Back up database and files(what you think are important for you) any changes in core files will be over written so be aware.
2) using your ftp client ( like filezilla or any of your choice) go to your
wp themes folder i.e
wp-content/themes and rename the existing classipress folder into something else like oldclassipress etc.
3) unzip the 3.1.8 and upload the new one into same folder
wp-content/themes and let the upload complete .
4) go to admin page of your
Wp installation and activate the new link(normally it will be automatically activated.
5) now relocate the important file/images i.e logo etc
you are up again with new version.
its all what i did with the help of dimitris(AppThemes Support Staff ) with thanks. but of course others can add or correct information here.